Global debt reaches US$365 trillion as interest costs rise

Global debt, encompassing governments, households, and companies, has surpassed US$365 trillion, according to data from the Institute of International Finance. The total debt increased by US$10 trillion during the first half of 2026, with emerging markets driving much of this growth. This figure represents approximately US$44,000 for every person on Earth.

The primary economic concern is the rising cost of servicing this debt. Advanced economies paid over US$3.3 trillion in interest on government bonds over the past year, a figure that exceeds estimated global spending on defense, clean energy, or artificial intelligence. As interest rates rise, governments are forced to refinance maturing obligations at higher costs, diverting funds away from public services such as healthcare, education, and infrastructure.

Historical data suggests that high debt-to-GDP ratios can lead to financial instability. Research indicates that in 51 out of 52 historical cases where a country's gross debt exceeded 130% of GDP, the nation experienced a default, debt restructuring, currency devaluation, or extreme inflation. While some nations like Japan have managed to maintain high debt levels without crisis, others face increasing pressure as investors demand higher compensation for fiscal risks.